Luxury cars are fast becoming a must-have accessory for China's wealthy residents, according to the industry marketing group Automotive Resources Asia (ARA).

"The number of ultra-rich Chinese is astounding," ARA's president Michael Dunne told the BBC's World Business Report.

China's auto sector is one of the great success stories in a world of diminishing economic possibilities, with brands such as Mercedes Benz and Audi benefiting from the rising trend.

Face and power is everything and people who have money buy a Mercedes Benz

Michael Dunne, Automotive Resources

Last year car sales in the country grew by 55% and it has become the world's fourth largest market.

Car maker DaimlerChrysler is now looking to open factories in China to make up to 30,000 of its luxury Mercedes cars a year for the local market.

Purchasing power

The idea is that Mercedes would send kits to China where they would be assembled by local workers.

But the cars will not come cheaply, so can the Chinese afford them?

Mr Dunne told the WBR there was little doubt that a hungry market awaits the new cars.

"There are surprise pockets of very wealthy people in China ready and willing to buy the very best cars in the world."

China is the largest single market for Audi

Mr Dunne said rival carmaker Audi, which has been selling cars in China since 1992, now counts the country as its biggest market. It sold 35,000 Audi A6 saloons in 2002 - at an average cost of $70,000 (£43,000).

Emperor substitute

Mr Dunne said the popular E class Mercedes currently costs around $100,000 (£62,000) but that price should come down when the cars are built locally.

Nonetheless, they are already one of the most popular brands, accounting for one in 15 cars in the capital Beijing.

You can image how happy Mercedes would be to have officials riding around the capital city in new locally-built S-class sedans

Michael Dunne

"Face and power is everything and people who have money buy a Mercedes Benz," said Mr Dunne.

"Mercedes is the pinnacle of power, prestige and image for Chinese people.

"They used to worship the Emperor - the Emperor no longer rules China, now they tend to worship the symbol of wealth and success and that is the Mercedes Benz," he explained.

Olympic ideal

It is thought that the German manufacturer will start production of its Mercedes cars within two or three years.

"They want to take advantage of the Olympics which happen in 2008," said Mr Dunne.

"You can image how happy Mercedes would be to have officials riding around the capital city in brand new locally-built E-class and S-class sedans."

Other luxury car manufacturers who are hoping to exploit the market include BMW, which recently got approval from the central government to start production in northern China.